TLDR
- CoreWeave (CRWV) stock fell about 14% on Wednesday to trade near $67 after a selloff in its bonds.
- The yield on its 9.625% notes due 2032 rose to 15.06% from 13.42% at the start of October.
- Elon Musk replied “Yikes” to a post about the bond yields, and D.A. Davidson’s Gil Luria warned on its borrowing costs.
- The company has raised more than $35 billion this year, with debt and lease obligations near $52 billion.
- Oracle and Nebius also fell, and the Philadelphia Semiconductor Index logged a sixth straight daily decline.
CoreWeave (CRWV) stock fell about 14% on Wednesday to trade near $67.30, down $10.51 on the day. A selloff in the company’s bonds raised fresh worries about its debt load and future borrowing costs.
CoreWeave, Inc. Class A Common Stock, CRWV
One report put the close at $67.52, which would be the lowest close since $60.82 on July 29, according to Dow Jones Market Data. The stock is down 3% this year and has fallen 20% in October.
CRWV traded as low as $65.55 during the session. That is close to its 52-week low of $60.55 and more than 56% below its 52-week high of $150.40.
The bond market set the tone. The company’s 9.625% notes due 2032 traded at $79.50, down from $85 at the start of the month.
The yield on those notes climbed to 15.06% from 13.42% over the same stretch. That is a quick jump for a company that keeps going back to lenders.
Musk’s “Yikes” Adds Fuel
Venture capitalist Chamath Palihapitiya posted a chart of the yield on $1.25 billion of unsecured bonds due 2032. It showed the yield near 15% on Tuesday before closing at a record 14.5%.
Elon Musk replied with a single word: “Yikes.” The reply went viral, and the stock was down as much as 15.1% in morning trading.
D.A. Davidson analyst Gil Luria also weighed in. He said CoreWeave is borrowing at around 9% while earning just 1% on its investments.
Luria argued the stock could go to zero if the AI boom cracks. Co-founder Brannin McBee defended the company’s borrowing strategy.
Debt Load and the Wider Market
CoreWeave has raised more than $35 billion this year. It used chip-backed loans, high-yield bonds, convertible bonds and stock sales.
Debt and lease obligations totaled about $52 billion at the end of June. A Form 144 insider selling notice filed on Tuesday added to the gloomy mood.
The broader market did not help. The Nasdaq fell 0.8% and the S&P 500 lost 0.6%.
The Philadelphia Semiconductor Index posted its sixth straight daily decline. Rising interest rates have been weighing on AI infrastructure names.
Oracle and Nebius Group also fell in sympathy. It was a rough Wednesday for anyone holding the group.
As of 10:43 a.m. EDT, CRWV was trading at $67.30, down 13.51% on the day.
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